MBE K

Question 1

Accord & Satisfaction - its impact on which duty?

Answer 1

Discharges both the original K and the accord K

Question 2

Accord agreement. What is required?

Answer 2

A party to a K agrees to accept a performance from the other party that differs from the performance that was promised in the existing K, in satisfaction of the other party’s existing duty

Generally, consideration is required

Question 3

Pre existing Duty rule at common law

Answer 3

A promise to perform a preexisting legal duty does not qualify as consideration

Question 4

UCC firm offer. Does it need consideration?

Answer 4

• Under the UCC’s firm offer rule, an offer to buy or sell goods is irrevocable if
○ the offeror is a merchant,
○ there is an assurance that the offer is to remain open, and
the assurance is contained in a signed writing from the offeror.

Question 5

Shipment of nonconforming goods + notice of accommodation

Answer 5

Counteroffer

Question 6

A covenant of —–is implied in all contracts (common law and UCC)

Answer 6

Good Faith and Fair dealing

Question 7

What can a buyer of nonconforming goods can do?

Answer 7

Right to accept or reject all or part of shipment

Question 8

Defense of Impracticability

Answer 8

An unforeseen event must occur,

the nonoccurrence of which must have been a basic assumption on which the K was made

Question 9

Parol Evidence Rule

Answer 9

The parol evidence rule generally prevents a party to a written contract from presenting prior extrinsic evidence that contradicts the terms of the contract as written.

Question 10

PER Total Integration

Answer 10

If the writing completely expresses all of the terms of the parties’ agreement, then it is a total integration, and the parties cannot introduce any extrinsic evidence (oral or written) of prior or contemporaneous understandings or negotiations

Question 11

PER Partial integration

Answer 11

on the other hand, the writing sets forth the parties’ agreement about some terms, but not all terms, then it is a partial integration.

Question 12

UCC PER

Answer 12

The UCC essentially presumes that a contract is a partial integration.

Question 13

Partial integration and supplementary evidence

Answer 13

When a writing is a partial integration, the parties are permitted to introduce supplementary extrinsic evidence (oral or written) of other terms as long as the evidence is consistent with the writing, but not if the evidence contradicts the terms of the writing.

Question 14

Permitted supplementary evidence even when UCC Terms are not ambiguous

Answer 14

Under the UCC, even if the terms of a written contract for the sale of goods appear to be unambiguous, a party may explain or supplement the terms by evidence of trade usage or course of dealings or performance. Trade usage is any practice or method of dealing in the particular business or industry that is practiced with such regularity so as to justify an expectation that it will be practiced in the instant case.

Question 15

A course of performance under PER

Answer 15

A course of performance is a sequence of conduct that is relevant to understanding an agreement between the parties if: (i) the agreement involves repeated occasions for performance by a party, and (ii) the other party accepts performance without objection and with knowledge of the course of performance.

Question 16

A party’s performance of duty + The counter party’s duty subject to an unsatisfied express condition precedent + Condition not satisfied.

Any party breach?

Answer 16

Nope

Question 17

Breach & Performance under CL

Answer 17

Under common law, a material breach of contract allows the nonbreaching party to withhold any promised performance and to pursue remedies for the breach, including damages. A breach is considered minor when the breaching party has substantially performed.

Question 18

Language for creating a condition

Answer 18

Answer choice C is incorrect because the “first week of June” start date was not an express condition. Express conditions generally contain language such as, “on condition that” or “provided that.”

Question 19

Good faith purchaser of goods

Answer 19

A good faith purchaser of goods in the ordinary course of business from a merchant takes good title to the goods if the goods have been entrusted by the owner to the merchant and the merchant deals in the same kind of goods.

Question 20

UCC + Nonconforming goods + No instruction from the seller re: acceptance within reasonable time

Answer 20

Under the UCC, if either the tender or the goods are nonconforming, then the buyer has the right to accept or reject all or part of the goods. Upon tender of nonconforming goods, a buyer must retain possession of the rejected goods for a reasonable period of time to allow the seller to reclaim them. However, a buyer’s attempts in good faith to dispose of defective goods when the seller fails to give instructions within a reasonable time are not to be regarded as an acceptance.

Question 21

Requirement for recovering consequential damages

Answer 21

Consequential damages are recoverable in a breach of contract actions only if they were reasonably foreseeable at the time that the contract was entered into.

Question 22

Anticipatory repudiation

Answer 22

Anticipatory repudiation occurs when there has been an unequivocal refusal of the buyer or seller to perform, or when reasonable grounds for insecurity arise with respect to the performance of either party, and the other party fails to provide adequate assurances within a reasonable time (not to exceed 30 days under the UCC).

Question 23

CL Breach? When is a breach minor?

Answer 23

Under common law, a material breach of contract occurs when the nonbreaching party does not receive the substantial benefit of its bargain. A material breach of contract allows the nonbreaching party to withhold any promised performance and to pursue remedies for the breach, including damages. A breach is considered minor when the breaching party has substantially performed.

Question 24

Purpose of Promissory Estoppel

Answer 24

To enforce Ks without consideration

Question 25

Waiver of condition. How? Can a party use that waived condition as a defense?

Answer 25

Either by words or conducts.

Estopped from using that condition as a defense if the other party reasonably relied on the party’s words or conduct that the condition has been waived.

Question 26

When obligations are delegated, is the delegator released from liability?

Answer 26

N

Question 27

When does the gratuitous assignment of contract rights terminate (automatically)?

Answer 27

Upon the death of the assignor.

Question 28

Quasi Contract

Answer 28

When a plaintiff confers a benefit on a defendant and the plaintiff has a reasonable expectation of compensation, allowing the defendant to retain the benefit without compensating the plaintiff would be unjust.
Cabin owner vs. Contract hired by the tenant

Question 29

When would be the bad-faith argument re: contract applied?

Answer 29

Fraud, other dishonest actions

Question 30

Mistake + annuity K + Assumption of risks

Answer 30

A mistake is a belief that is not in accord with the facts as to a basic assumption on which the contract was made that materially affects performance. Here, the ex-husband and ex-wife both entered into this agreement without knowledge of the wife’s illness, both presumably believing that the ex-wife would live for some number of years. However, not every contract based on a mistaken belief will be rescinded because of that mistake. If the adversely affected party assumed the risk of mistake, he will be unable to rescind. The purchaser of an annuity contract assumes the risk that the person on whose life the annuity is based will die before the price paid for the annuity is recouped, and the issuer of the contract assumes the risk that that person will live beyond the recoupment date. This assumption of the risk is inherent in the nature of the annuity contract.

Question 31

Is a subcontractor’s bid a binding offer?

Answer 31

No, just an outstanding ofer.

Question 32

Merchants + UCC + Acceptances

Answer 32

hen both parties to a contract governed by the UCC are merchants, the acceptances are often default forms that contain different and additional terms from those specifically agreed upon by the parties.

Question 33

Merchants + UCC + Acceptances + Additional terms

Answer 33

An additional term in the acceptance is automatically included in the contract when both parties are merchants, unless the term materially alters the original contract, the offer expressly limits acceptance to the terms of the offer, or the offeror has already objected to the additional terms, or objects within a reasonable time after notice of them was received.

Question 34

Condition to revoke an offer

Answer 34

An offer is revoked when the offeror makes a manifestation of an intention not to enter into the proposed contract. If the offeree acquires reliable information that the offeror has taken definite action inconsistent with the offer, the offer is automatically revoked (i.e., a constructive revocation occurs).

Question 35

Option contract valid only for merchants?

Answer 35

an option contract, in which an offeree gives consideration to limit an offeror’s power to revoke an offer, may be valid even if entered into by parties who are not merchants.

Question 36

Option contract - Consideratin needed?

Firm offer - consideration needed?

Answer 36

Option K - CL - Yes

Firm offer -UCC and merchant - no

Question 37

UCC definition of merchant

Answer 37

the definition of merchant under the firm offer rule includes not only a person who regularly deals in the type of goods that are the subject of the offer (here, artwork) or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction, but also any businessperson when the transaction is of a commercial nature.

Question 38

Mailbox rule and Option Contract

Answer 38

Does not apply to option contract

When received or within reasonable time.

Question 39

Mailbox rule and Firm Offer

Answer 39

accpetance must be RECEIVED by the merchant

Question 40

Valid option K + offeror’s death of incapacity

Answer 40

Valid options do not terminate upon death or mental incapacity of the offeror because consideration was paid to keep the offer open during the option period; the offer is therefore made irrevocable during that period.

cf) Gratuitous assignment of K - termination upon assignor’s death

Question 41

When is the retraction(revocation) of offer effective?

Answer 41

“[A] retraction of an offer can have no effect until it is communicated to the person to whom the offer is made.”

Question 42

UCC SOF Confirming memo

Answer 42

Under the Code, between merchants if (i) within a reasonable time, (ii) a party sends a writing in confirmation of the contract “sufficient against the sender[,]” (iii) that is received by the receiving party and read and understood by the receiving party, (iv) and not objected to within 10 days, then the writing is a confirming memo that will satisfy the writing requirement

Question 43

2-207 (a)

Answer 43

A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.

Question 44

2-207(b)

Answer 44

(b) Effect on contract.–The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
(1) the offer expressly limits acceptance to the terms of the offer; (2) they materially alter it; or
(3) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

Question 45

A promise not to bring legal action as consideration

Answer 45

A promise not to bring a legal action or to assert a particular claim or defense in such an action generally can serve as consideration for a settlement agreement because the party making the promise is foregoing a legal right. The legal action need not be one that is certain to succeed. Instead, the claim or defense must be in fact doubtful due to uncertainty of facts or law, or the party failing to assert the claim or defense must believe in good faith that it may be fairly determined to be valid. Here, the tourist had a good-faith belief as to the validity of the negligence claim against the guide.

Question 46

Fraudulent misrep

Answer 46

A fraudulent misrepresentation can render a contract voidable by the adversely affected party if (i) the misrepresentation is fraudulent (i.e., a false assertion of fact made knowingly or recklessly without knowledge of its truth, and with the intent to mislead the other party), (ii) the misrepresentation induced assent to the contract, and (iii) the adversely affected party justifiably relied on the misrepresentation.

Question 47

Quasi K

Answer 47

√=When a plaintiff confers a benefit on a defendant and the plaintiff has a reasonable expectation of compensation, allowing the defendant to retain the benefit without compensating the plaintiff would be unjust. In this case, the court can permit the plaintiff to recover the value of the benefit to prevent the unjust enrichment.

Question 48

Subsequent assignment of contractual right

Answer 48

subsequent assignment of the same contractual right generally revokes any prior revocable assignment. A gratuitous assignment is generally a revocable assignment, unless it is supported by a document, and it does not appear that this one does.

Question 49

Assignment of K - Still liable for payment?

Answer 49

Yes

Question 50

Parol Evidence & Condition precedent

Answer 50

Parol evidence may be admitted to prove a condition precedent to the existence of the contract.
the parol evidence rule does not apply to this oral agreement because it deals with the existence of a condition precedent to the existence of the contract.

Question 51

Deadline. Waived by the bride + Artist relied + Revocation of waiver ( reinstatement of deadline) + Failed to deliver. Claim?

Answer 51

Yes. A party whose duty is subject to a condition can waive the condition, either by words or by conduct. A condition that is material to the party’s primary purpose may be reinstated by the party. A condition that is not material may be reinstated if the waiving party communicates a retraction of the waiver before the condition is due to occur, and the other party has not already suffered detrimental reliance. Here, the artist detrimentally relied on the woman’s waiver of the deadline when he accepted another job in lieu of completing the postcards, and then subsequently breached the contract for that job to try to meet the July 15 deadline. Therefore, the woman cannot reinstate the July 15 deadline, and she is bound by her waiver of this condition and has a duty to pay the artist for delivery of the cards.

Question 52

Demand for assurance re: repudiation in UCC

Answer 52

A party can demand assurances of performance if there are reasonable grounds for insecurity about the other party’s ability or willingness to perform. Once such assurances are requested, performance may be suspended until they are provided. Failure to give adequate assurances within a reasonable time can be treated as a repudiation. Under the UCC, the demand for assurances must be made in writing.

Question 53

Contract of identified goods & Risk of loss

Answer 53

If a contract deals with identified goods (e.g., a specific painting or specifically identified items of inventory), and those goods are totally destroyed through no fault of the seller prior to the risk of loss being shifted to the buyer, neither party is required to perform and neither party has breached.

Question 54

Party that materially breached. Damage claim?

Answer 54

Restitution claim

Question 55

Attractive nuisance

Answer 55

Under the “attractive nuisance” doctrine, a land possessor may be liable for injuries to children trespassing on the land if (i) an artificial condition exists in a place where the land possessor knows or has reason to know that children are likely to trespass, (ii) the land possessor knows or has reason to know the condition poses an unreasonable risk of death or serious bodily injury to children, (iii) children do not discover or cannot appreciate the danger of the condition, (iv) the utility to the land possessor of maintaining the condition and the burden of eliminating the danger are slight compared to the risk of harm presented to children, and (v) the land possessor fails to exercise reasonable care.

Question 56

Anticipatory repudiation - when can’t you sue early?

Answer 56

completeed the entire performance and waiting for payment ( built the thing and I gotta wait)

Question 57

Opinion or puffery - express warranty?

Answer 57

No

Question 58

Right of Reclamation

Answer 58

When a buyer receives goods on credit, and the seller learns that the buyer is insolvent, the seller may reclaim the goods, provided a demand is made within 10 days after the buyer’s receipt of the goods.

Question 59

Limitation of consequential damages re: implied warranty of merchantibility

Answer 59

With respect to a breach of the implied warranty of merchantability, while a limitation of consequential damages is permitted, the limitation of such damages for personal injury in the case of consumer goods is prima facie unconscionable.

Question 60

Buyer wants to gain goods in possession of the seller. How?

Answer 60

A buyer may gain possession of goods under contract that are in the seller’s possession through an action such as replevin, but in order to do so the goods must be identified.

Question 61

PER - extrinsic evidence of a condition precedent.

Answer 61

PER doesn’t apply

Question 62

UCC + Prohibition on oral modification of the contract. Enforceable?

Answer 62

Yes. Under the Uniform Commercial Code (UCC), a clause in a written contract that prohibits oral modification of the contract is enforceable.

Question 63

Auction - withdrawal of a higher bid.

Answer 63

onsequently, the withdrawal of a higher bid does not automatically reinstate the next lower bid.

Question 64

UCC - formation of K

Answer 64

Under the UCC, a contract is formed if parties intend to contract, and there is a reasonably certain basis for giving a remedy.

Question 65

Auctioneer’s right to withdraw

Answer 65

Unless specifically announced otherwise, an auction is with reserve, meaning that the seller has the right to withdraw an item from sale at any time before the auctioneer announces the completion of the sale.

Question 66

Offeror’s power. Mode of acceptance

Answer 66

The offeror can dictate the manner and means by which an offer may be accepted. Unless the offeror specifically requires the offeree to accept in a particular manner or by using a particular means, the offeree can accept in any reasonable manner and by any reasonable means. Here, the woman did not specify that the acceptance could only be mailed to her business address; she merely suggested that an acceptance could be mailed to her business address.

Question 67

At least one non-merchant + acceptance with a modified term . Acceptance?

Answer 67

For a sale of goods where at least one party is a nonmerchant, an acceptance that contains a modification to the terms in the offer is nevertheless an acceptance.

Question 68

Accord and satisfaction by a negotiable instrument

Answer 68

ex) Check
(1) the obligation must be unliquidated (i.e., uncertain in amount) or otherwise in dispute;
(2) the obligor must, in good faith, tender the negotiable instrument with a conspicuous statement that the instrument is tendered as full satisfaction of the obligation; and
(3) the obligee must obtain payment of the instrument (e.g., by cashing the check).
However, the buyer did not dispute the initial purchase price of the car. Absent a dispute, the check could not have been offered in good faith.

Question 69

Dischargeability of an original debt under accord

Answer 69

Although the original debt is not generally discharged immediately upon entering into an accord, once the creditor accepts the lesser amount offered by the accord, the original contract is discharged.

Question 70

A man promised his brother to give a desk as a gift. Enforceable?

Answer 70

Yes. a promise to make a gift in the future can be enforced if the requirements for promissory estoppel are met.

Question 71

A new promise to pay a debt. Enforceable?

Answer 71

Yes. A new promise to pay a debt after the statute of limitations has run is enforceable without any new consideration.

Question 72

Delegator’s liability

Answer 72

When obligations are delegated, the delegator is not released from liability, and recovery can be had against the delegator if the delegate does not perform, unless the other party to the contract agrees to release that party and substitute a new one (i.e., a novation occurs). T

Question 73

Common-law total integration test

Answer 73

Under the common-law four-corners rule, a court is required to look only to the wording of the document itself (i.e., within its “four corners”) in determining whether the parties intended the document to be a total integration of their agreement.

Question 74

UCC total integration test

Answer 74

Under the UCC, a court, in determining whether a contract constitutes a total integration of the parties’ agreement, should generally treat a written agreement as only a partial integration of the parties’ agreement unless the court can conclude that the parties’ “certainly would” have included the term in the written agreement.

Question 75

Standard in determining the admissiblity of extrinsic evidence despite written agreement

Answer 75

plain-meaning rule, which provides that the objective definitions of contract terms control the meaning of the contract, may be applicable in ascertaining whether to admit extrinsic evidence despite the written agreement being a total integration.

Question 76

Course of performance

Answer 76

A course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance. Because the course of performance here has been consistent with the terms of the contract, the course of performance is irrelevant and the express terms of the contract regarding the gardener’s duty to pay will prevail.

Question 77

Failure to specify the assortment of goods. Whose duty?

Failure breach? on what condition?

Answer 77

When a contract fails to specify the assortment of goods, the duty to select the assortment falls on the buyer. If the buyer fails to specify the assortment of goods, then the seller can treat the failure as a breach by failure to accept the contracted-for goods only if the buyer’s failure materially impacts the seller’s performance.

Question 78

UCC installment K

Answer 78

Under the UCC, an installment contract is defined as one in which the goods are to be delivered in multiple shipments, and each shipment is to be separately accepted by the buyer. Payment by the buyer is due upon each delivery, unless the price cannot be apportioned.

Question 79

Available damages for non-breaching party

Answer 79

1. Exp dmg

2. Rel dmg

Question 80

Standard in determining exp dmg?

Answer 80

Foreseeability by the breaching party

Question 81

Seller’s breach in good faith. Buyer’s damages?

Answer 81

Out of pocket expenses

(Regardless of the time is of the essence clause”

Question 82

Prerequisites and duration of a firm offer

Answer 82

Under the UCC, an offer to buy or sell goods is irrevocable if the offeror is a merchant, there is an assurance that the offer is to remain open, and the assurance is contained in a signed writing from the offeror. However, the irrevocability of a firm offer cannot exceed three months unless the offeree gives consideration to validate it beyond the three-month period.

Question 83

The rights of a winning bidder.

Two exceptions to this rule?

Answer 83

When an auctioneer knowingly accepts a bid by the seller or on her behalf, or procures such a bid to drive up the price of the goods, the winning bidder may avoid the sale or, at her option, take the goods at the price of the last good-faith bid prior to the end of the auction.

There are two exceptions to this rule, which are that
(i) a seller may bid at a forced sale and

(ii) a seller may bid if she specifically gives notice that she reserves the right to bid. I

n this case, the bank conducted a forced sale of the owner’s delivery van. As a result, the owner (seller) was permitted to bid on the van at the auction, even without first disclosing his interest in the van and reserving the right to bid.

Question 84

Bidder’s right to withdraw his bid in auction

Answer 84

A bidder may retract his bid until the auctioneer announces the completion of the sale. Here, the neighbor informed the auctioneer that he was withdrawing his bid before the auctioneer announced the completion of his sale.

Question 85

Firm offer requirements + Effective period

Answer 85

Under the UCC, an offer to buy or sell goods is irrevocable if the offeror is a merchant, there is an assurance that the offer is to remain open, and the assurance is contained in a signed writing from the offeror. The irrevocability of a firm offer cannot exceed three months unless the offeree gives consideration to validate it beyond the three-month period.

Question 86

Impracticability defense to contract formation?

Answer 86

No. Impracticability is an excuse to perform

Question 87

An offer involving subject matter that is destroyed

Answer 87

is terminated.

Question 88

UCC K modification requirement

Answer 88

Unlike under the common law, under Article 2, no consideration is necessary to modify a contract; however, good faith is required.

Question 89

Settlement of debts

Answer 89

Settling past, unpaid debt.

While the law permits the settlement of debts, consideration is required for a settlement to be enforceable. Under the preexisting duty rule, the mechanic’s promise to forbear from suing to collect was not supported by consideration from the farmer, because the amount due was liquidated and the farmer did not promise to do anything more than he was already obligated to do. The farmer did pay $1,000, but as a partial payment of an undisputed debt, that money is insufficient consideration for the mechanic’s promise not to sue.

Question 90

Court’s meanto enforce charitable subscriptions

Answer 90

Courts often apply the doctrine of promissory estoppel to enforce charitable subscriptions. In some cases, they presume that the charity detrimentally relied on the promised contribution. A charitable subscription (i.e., a written promise) is enforceable under the doctrine of promissory estoppel without proof that the charity relied on the promise.

Question 91

Mutual mistake

Answer 91

voidable by the adversely affected party upon proof of the following:

i) Mistake of fact existing at the time the contract was formed;
ii) The mistake relates to a basic assumption of the contract;
iii) The mistake has a material impact on the transaction; and
iv) The adversely affected party did not assume the risk of the mistake.

Question 92

A fren who conspired with the organizer + withdrew from this shit. Entitlement?

Answer 92

Although the friend is not entitled to enforce the illegal agreement between him and the organizer, the friend is entitled to restitution with regard to the $1,000 paid to the organizer since he withdrew from the transaction before the raffle was held and did not engage in serious misconduct.

Think about policy

Question 93

When does the implied warranty of merchantibility arise?

Answer 93

Under UCC Article 2, a warranty of merchantability is implied whenever the seller of goods is a merchant who deals in goods of the kind sold. To be merchantable, goods must be fit for their ordinary purpose and pass without objection in the trade. A breach of this warranty must have been present at the time of the sale.

Question 94

Part performance requirement of land sale K

Answer 94

1. Possession
2. Payment
3. Part performance (if two satisfied)

Question 95

Implied warranty of merchantibility

Answer 95

Merchant.
Ordinary commercial purpose
Discailiming (only when conspicouous_+ the term merchantibility)

Question 96

Implied warranty of F F PP

Answer 96

1. buyer reliance
2. seller expertise
3. special type of good
4. merchantnon-merchant
5. disclaimer ( CONSPICUOUS + WRITING)

Question 97

Instances of not finding implied warr / merch

Answer 97

if the buyer, before entering into the contract, has examined the goods as fully as the buyer desires, or has refused to examine the goods, there is no implied warranty with respect to defects that an examination would have revealed to the buyer.

Question 98

Body builder hit by the frame. Excuse? Remedy?

Answer 98

Discharged by impracticability

No legal recovery but the equitable doctrine of restitution (quasi-K) applies to prevent unjust enrichment. A party may recover in quasi-contract for any benefit that was conferred prior to impracticability.

Question 99

Who can donee beneficiary sue?

Answer 99

An intended beneficiary of a “gift promise” (a donee beneficiary) may sue only the promisor.

Question 100

Who can creditor beneficiary sue?

Answer 100

creditor beneficiary. A creditor beneficiary has the right to sue either the promisor or the promisee to enforce the contract.

Question 101

Instances where delegation is not permitted

Answer 101

delegation is not permitted when the other party to the contract has a substantial interest in having the delegating individual perform, such as in a personal services contract involving taste or a special skill.

Question 102

Revocability of assignment. Exceptions.

Answer 102

If no consideration supports an assignment of contractual rights (a gratuitous assignment), the assignment is generally revocable, unless the obligor has already performed or promissory estoppel applies. Here, the enthusiast accepted the motorcycle without protest. His acceptance effectively revoked the gratuitous assignment.
The shop, as obligor, may be compelled to comply if the assignment is valid and enforceable by the assignee. Here, however, the assignment was gratuitous and was revoked by the enthusiast’s acceptance of the motorcycle.

Question 103

Delegation and liability

Answer 103

en obligations are delegated, the delegator is not released from liability, and recovery can be had against the delegator if the delegate does not perform, unless the other party to the contract agrees to release that party and substitute a new one.

Question 104

Suretyship

Answer 104

The Statute of Frauds applies to suretyship agreements. Suretyship is a three-party contract, wherein one party (the surety) promises a second party (the obligee) that the surety will be responsible for any debt or other obligation of a third party (the principal) resulting from the principal’s failure to pay as agreed. A promise to answer for the debt of another must generally be in writing to be enforceable.

Question 105

Course of performance (current contract - same parties)/
course of dealings ( previous K - same parties)/
Trade usage

Answer 105

. Under the UCC, a party may explain or supplement the terms of the contract—even if the terms are unambiguous—by evidence of trade usage, course of dealing, or course of performance. Evidence of the parties’ conduct with respect to the current contract at issue is accorded priority over evidence of the past course of dealings or trade usage.

Question 106

Condition precedent –> Nonoccurrence –> made it anyway and delivered late. Breach?

Answer 106

yes.

A party’s duty to perform under a contract can be made contingent upon the occurrence of a condition precedent. In that case, the party’s performance will not become due until the condition occurs or the nonoccurrence is excused.
One excuse for nonoccurrence is waiver, which arises when the party whose duty is subject to the condition indicates by words or conduct that the condition need not be met.

Answer choice B is incorrect. Here, the manufacturer’s duty to make the sneakers was contingent upon the designer’s sending the specifications by February 15 (condition precedent).

Although the designer did not send the specifications until February 27 (nonoccurrence),

the manufacturer made the sneakers anyway (waiver).

Manufacturer still required to perform as in K

Question 107

Prerequisite to sue under the doctrine of anticipatory repudiation

Answer 107

The doctrine of anticipatory repudiation is applicable when a promisor repudiates a promise before the time for performance is due. The repudiation must be clear and unequivocal, as opposed to merely creating insecurity. Here, the buyer stated that he did not intend to purchase the farm unless he was legally obligated to do so. Because the buyer is still bound by the contract, he is legally obligated to purchase the farm; his concern about entering the duck market does not amount to a clear and unequivocal statement that he will not perform.

Question 108

Brother repudiate the entire K + not paid two months worth of loan = What amount able to recover?

Answer 108

Two months

If at the time of a breach the only remaining duties of performance are (i) those of the party in breach and (ii) for the payment of money in installments not related to one another, then breach by nonperformance as to less than the whole, whether or not accompanied or followed by a repudiation, does not give rise to a claim for damages for total breach and is a partial breach of contract only. In this case, on August 31, the brother is only entitled to recover the amount due for July and August, as the other installments are not due yet

Question 109

Auction.

Lot.

No reserve auction + Withdrawal?

Answer 109

Answer choice C is correct. In an auction, each lot is considered to be a separate sale. In a no-reserve auction, after the auctioneer calls for bids on the goods in a lot, the goods cannot be withdrawn unless no bid is received within a reasonable time. With regard to the third lot, because the auctioneer had not called for bids on that lot, the goods can be withdrawn

Question 110

Revocation of Option K

Answer 110

Revocation occurs when: the offeror directly communicates the revocation to the offeree or the offeree learns information from a reliable source that reasonably indicates the offer was revoked (eg, house sold to another buyer).

Question 111

Bid contemporaneous with hammer falling

Answer 111

When a bid is made contemporaneously with the falling of the hammer, the auctioneer may, at his discretion, treat the bid as continuing the bidding process or declare the sale completed at the fall of the hammer. In this case, the museum owner made his bid contemporaneously with the falling of the hammer. The auctioneer chose, at his discretion, to treat the museum owner’s bid as continuing the bidding process. The third party subsequently made a bid that was unmatched. Therefore, because the third party’s bid was accepted by the auctioneer as the winning bid, the third party is entitled to the automobile.

Question 112

…right to cancel by Jan 10…

valid offer?

Answer 112

No.

The primary test of whether a communication is an offer is whether an individual receiving the communication would believe that he could enter into an enforceable deal by satisfying the condition.

Question 113

an offer in which a creditor promises to accept a payment for less than the amount owed prior to the due date

Answer 113

IS sufficient consideration to support a return promise by a borrower accepting the offer.

Question 114

Void ab initio

Answer 114

void from start - absolutely void

Question 115

Void vs. Voidable K

Answer 115

Void contracts

It involves illegal activity
It is against public policy
It is impossible to perform
It involves a party who is not legally competent

Voidable contracts

Fraud or misrepresentation
Terms are unconscionable
Duress or undue influence
Mutual mistake

Question 116

Ground for not enforcing a K violating a state statute

Answer 116

Public Policy

Question 117

incapacity

Answer 117

The incapacity of a particular person to perform his or her duty under a contract renders the performance impracticable and operates as an excuse for nonperformance.

Question 118

Impracticability

Answer 118

impracticability to be available, the following conditions must also be met:

i) An unforeseeable event has occurred;
ii) Nonoccurrence of the event was a basic assumption on which the contract was made; and
iii) The party seeking discharge is not at fault.

Question 119

Patient sues the janitor service. (K between hospital and the service). Success?

Answer 119

No. Public policy makes the K unenforceable.

Question 120

Delegation of duty and the implication on 3P theory

Answer 120

The original contract beneficiary becomes an intended benficiary.

Question 121

Suretyship

Answer 121

Suretyship is a three-party contract, wherein one party (the surety) promises a second party (the obligee) that the surety will be responsible for any debt or other obligation of a third party (the principal) resulting from the principal’s failure to pay as agreed. Under the Statute of Frauds, a suretyship contract, or contract to answer for the debt of another, must be signed by the party to be charged.

Question 122

Nonconforming tender by a seller under one segment of an installation K, buyer can reject —–

Answer 122

can reject only if the nonconformity substantially impairs the value of that shipment to the buyer and cannot be cured.

Question 123

Express condition

Answer 123

A performance that is subject to an express condition cannot become due unless the condition occurs or its nonoccurrence is excused. The duty of good faith imposed an obligation on the buyer to make reasonable efforts to secure bank financing.

Question 124

Rejection in installment K

Answer 124

UCC § 2-612(2) provides that a buyer may reject any installment that is nonconforming if the nonconformity substantially impairs the value of that installment and it cannot be cured.

Question 125

Non breaching party entitled to recover when?

Answer 125

According to the Restatement (Second) of Contracts, a nonbreaching party is entitled to recover damages that the party in breach “had reason to foresee as a probable result of the breach” when the parties entered into the contract. The rancher’s experience and the frequency of hailstorms in the fall combined to make the loss resulting from the rancher’s breach foreseeable.

Question 126

Damages of lost profits. standard?

Answer 126

Reasonable certainty

Question 127

Damages for failing to perform a real estate sales contract

Answer 127

the difference between the contract price and the market value on the date of the breach.

Question 128

mechanic service performed + car destroyed due to hurricane. Result?

Answer 128

The defense of impracticability (impossibility) is available if the specific subject matter of the contract is destroyed. In this case, the exotic convertible was destroyed through no fault of either party. As a result, the parties were no longer required to perform under the contract. T

Question 129

mechanic service performed + car destroyed due to hurricane. Unjust enrichment?

Answer 129

No.

The car restorer can still recover in quasi-contract for any benefit that was conferred prior to impracticability, but the court would only award restitutionary recovery in order to prevent the unjust enrichment. When a defendant is unjustly enriched by the plaintiff, restitution generally allows the plaintiff to recover on the benefit conferred by the plaintiff upon the defendant, rather than on the harm suffered by the plaintiff. Here, no benefit has been conferred, and thus the car restorer cannot recover the value of his service.

Question 130

Quasi K

Answer 130

A court may allow restitutionary recovery if:

i) The plaintiff has conferred a measurable benefit on the defendant;
ii) The plaintiff acted without gratuitous intent; and
iii) It would be unfair to let the defendant retain the benefit because either (i) the defendant had an opportunity to decline the benefit but knowingly accepted it, or (ii) the plaintiff had a reasonable excuse for not giving the defendant such opportunity (e.g., because of an emergency).

Question 131

Two examples where specific performance may be allowed

Answer 131

When damages are an inadequate remedy, the nonbreaching party may pursue the equitable remedy of specific performance. And, when a promisor fails to pay a third-party beneficiary, the promisee, on behalf of the third-party beneficiary, can sue the promisor for specific performance of the promise.

Question 132

Consideration

Answer 132

1. Bargained for consideration

2. Legal detrimnent/benefit

Question 133

Gift promise?

Answer 133

Gen not binding

Question 134

Failure of implied conditions

Answer 134

1. Material Breach

2. Substantial Performance

Question 135

Violation of perfect tender rule. What can buyer do?

Answer 135

1. accept
2. reject - notice
3. Accept part / reject part

Question 136

Material Misrepresentation

Answer 136

1. Scienter (intent)
2. Reliance
3. Misrepresentation
   Materiality of misrepresentation

Question 137

Settlement of a legal claim

Answer 137

A promise not to assert or a release of a claim or defense that proves to be invalid does not constitute consideration, unless the claim or defense is in fact doubtful due to uncertainty of facts or law, or the party promising not to assert or releasing the claim or defense believes in good faith that it may be fairly determined to be valid. Restatement (Second) of Contracts § 74(a).

Question 138

Assignment

with / without cnsdr

Answer 138

With consideration - First in time controls

Without consideration - last in time